"The Court ordered an insurance company to pay $10 million [dropped from a lower court's $15 million ruling] for wrongly revoking the insurance policy of a 17-year-old college student after he tested positive for HIV. ' That appears to be the most an insurance company has ever been ordered to pay in a case involving the practice known as rescission, in which insurance companies retroactively cancel coverage for policyholders based on alleged misstatements—sometimes right after diagnoses of life-threatening diseases. …

Jerome Mitchell learned that he had HIV when, while heading to college, he donated blood. Fortis then rescinded his coverage, citing what turned out to be an erroneous note from a nurse in his medical records that indicated that he might have been diagnosed prior to his obtaining his insurance policy. Before the cancellation of the policy, an underwriter working for Fortis wrote to a committee considering whether or not to rescind his policy: 'Technically, we do not have the results of the HIV tests. This is the only entry in the medical records regarding HIV status. Is it sufficient?' The underwriter's concerns were ignored and the rescission went forward."

What's even more remarkable about South Carolina Supreme Court Chief Justice Jean Hoefer Toal's ruling is that it comes from a conservative court in a very conservative Southern state "with one of the most pro-business climates in the country."

Comments

Judge Toal used exactly the right word: "reprehensible", in describing Fortis' conduct. Unfortunately, rescission is an industry-wide practice which makes it possible for insurance company CEO's to rake in those seven figure salaries, while killing people by revoking their policies when they become critically ill. President Obama, in his healthcare reform proposal, wants to make this practice illegal. Good luck, Mr. President! Healthcare insurers are not in business to provide healthcare, they're in business to make money. That means finding ways to collect premiums without paying claims, wherever possible.

Because I've been hearing-impaired since birth, it's been nigh-unto impossible for me to get health insurance. Obama wants to change that, too, by making it illegal to deny coverage to people with "pre-existing conditions". Of course, if recission and "pre-existing" coverage denials are outlawed, insurance companies might be forced to actually do what insurance is supposed to do! There's little chance of the powerful insurance lobby actually permitting that to happen.

The real impact of Judge Toal's ruling is, as Rod astutely points out, that it comes from a very conservative, pro-business state. Even they found Mitchell's treatment at the hands of his insurer too much to stomach. Could this be the harbinger of a weather change in government's attitudes towards insurance company shenanigans? I hope so!

Rod, my reaction to this was similar to yours: In South Carolina?! A little searching on the Web for Chief Justice Toal, and I doubt she is a conservative, at least by SC’s far-right standards. I didn’t take the time to search for the others.

One major pleasure about this case for me is imagining the kind of mental bind it puts the right-wingers. Of course, they are really on the side of the big insurance company, since that is their true constituency. The fact that the insured here is HIV-positive would normally be an irresistible talking point for them to rile up Satan’s troops on the talk shows and in the newspaper columns. But if the right-wingers were to come out publicly in support of the insurance company here, it would make their real agenda just a little too transparent. There is a limit, even for them, to how honestly they can announce their hatred of ordinary human beings.

It must annoy them no end to remain silent, and I’m sure some of the bolder ones are trying to smear Mr. Mitchell’s name. But most of the politicians probably have to button their lips.

I'm happy about this ruling. Recision is clearly just a way for insurance companies to wiggle out of their obligations.

I have more of an issue with eliminating the "pre-existing" conditions clause. It's the government's duty to enforce legal contracts, but should it be its duty to force companies to accept contracts that aren't in their best interests-- is that even morally acceptable?

It sucks for the people with pre-existing conditions, but at the same time, it would suck for me if I owned an insurance company and was forced to take on a huge liability in the form of someone who has already shown evidence of advanced heart disease. Maybe I don't understand what exactly the term "pre-existing" condition covers and what the proposals for change regarding it are ...